AFTERMARKET 4.0 – A Consumer’s Perspective
Who hasn’t heard of IoT? Who doesn’t know about Cloud Computing? Everybody, right! It is everywhere — in our homes, cars, home assistants, and phones. But did you know that it’s what organizations are using to improve their processes, their productivity and their profits? Probably not. With the advent of the steam engine came the first industrial revolution — the 1.0, so to speak. When we found the assembly line production technique, mass production became the foremost manufacturing process — the 2.0 of the industry. The invention of computing and computer-based machinery was the third revolution of industry, which was, until very recently, the dominant feature in manufacturing and many other industries. The current and ongoing revolution in the entire industry is the Industry 4.0, which is the culmination of Cloud Computing, IoT, Analytics and Cyber-Physical processes to automate, improve and manage entire businesses and manufacturing processes. A selective case of applying all these technologies and perspectives to the aftermarket and warranty is “Aftermarket 4.0”. Let’s say you own a brand-new BMW i8 with all its bells and whistles. It’s only natural that you would have a mobile app to manage your car. You have sensors in all the nooks and corners of the car to measure the speed, check if your seat belt is fastened, check the tire pressure and balance, know the number of people in the car, check the parking sensors, check the fuel mix sensors, and even check if you’re sleeping at the wheel. All these sensors would collect data and pass it on to an intelligent machine that would make a decentralized decision on what should happen next. And you would see all the collected data in a report in your mobile app. Then, when you take the car for a service at your dealership, which, by the way, was notified to give you a discount, for routine maintenance. Because the dealership has data about your good use of the car, you get an additional 5% off. Feels good, doesn’t it? Through this process, you’ve used cloud computing and mobile technologies to access the car details and take actions. You’ve experienced IoT with the full set of sensors in your car, and the analytics on the data, which provided actions you needed to take. There were cyber-physical processes that were managing the whole thing for you with little intervention. Welcome to Aftermarket 4.0! Imagine every need that you can regarding your vehicle. Fuel? Check! Engine Health? Check! Part Change? Check! With intelligent systems and sensors, the manufacturers and dealers can proactively help with any and every need of the vehicle. This doesn’t just start and end with servicing your car. Warranties, replacements, returns, trading, bartering and much more can be accomplished with standardized and identifiable sensors and nodes of a IoT. Not only does it create a much easier way to identify assets, estimate the value and trade them, it also creates a better environment for transparency for the customer and an experience that is much easier for purchase, repair, and return of vehicle necessities.
Aftermarket 4.0 – A Manufacturer’s Perspective
How many times have you faced the scorn of your customers because they could not return or claim warranty on your products? Have you ever wondered why, or if there was something you could do about it? As a customer myself, I have had more bad experiences than good when it comes to product returns and warranties. I always used to think, “Why doesn’t the manufacturer want his product back? After all, it is an opportunity to resell it, understand the product failure, retain a customer and create higher brand value. But many companies trade all this for the MRP of the product — seems out of balance, doesn’t it? But I don’t exactly blame the manufacturers because it is not that easy to quantify the benefit in a streamlined aftermarket process, a product return process, or a warranty process. On the other hand, the costs are easy to identify, but the benefits outweigh them three to one in this case. What if there was a way to reduce the cost of returns and warranty management, and be the brand your customers love most? Wouldn’t you be the first one to grab the opportunity? Let me introduce you to “Smart Factories”, an ongoing 4th revolution in the industry earmarked as “Industry 4.0”. Manufacturing always seems to be the first industry where optimization and profitability methodologies are created. Every business and processes in it are going to a level of automation, decentralized and intelligent decision making by machines and robots. This is not happening somewhere in the future; this is happening as we speak.Factories that can understand the objective of their operation, organize the raw materials and machinery, analyze the requirements, make in-production decisions and create the most optimized output are at this moment in use across the world. IoT is not new, but it is a new perspective on how the information captured by objects that are interconnected is used for improving the entire system. We need a core structure that can analyze and decide on what to do with the information. This is achieved by a Cyber-Physical system that can monitor the network of IoT nodes, make a digital copy or map of the entire physical process, and make decisions that optimize the use of all the resources available in the factory. loT has not been discussed yet, so will readers know what it is? The scope of such a system is not bound by just the confines of the factory or the manufacturing facility. The interconnected system of things (IoT) can consider the market demand in real time — the spikes and dips and the geographical distribution and many other factors — and feed this back to the system to be analyzed. The system can then decide which product, at which time, in which location must be produced at the optimum use of all the raw materials and resources. The system can extend up to any level of penetration across the value chain from the raw materials to the end consumer. Consider the flipside, which becomes the – the current industry state that is creating great opportunities in cost reduction and revenue generation for manufacturers and other players in the value chain. Consider a product recall or even a repair due to an isolated incident or part breakdown. Because you know the specifics of each product and where has it been dispatched, a major recall and assigning a nearby technician to resolve the broken/worn out part become easy to manage. Many lives can be saved by just knowing the condition of your product at a given time; the lack of information is what causes most accidents. Many lawsuits can be averted by just analyzing what happened to the product at the time of failure. Lives saved? What types of products are we talking about? Assessing product quality has multiple advantages. Not only does it tell you how well your product’s performance is in the long run, it will indicate when a failure may occur, what conditions might create the failure, how much impact your product has on the environment, and the product’s total footprint. Analysis alone is not the objective of such a system; decision making based on all the information and inferences is. Designing, prevention, and correction become that much easier with a smart factory. Industry 4.0 and Aftermarket 4.0 are only the start of what is going to be the norm for managing your business processes in all business functions and levels. It is up to you where and when to start adopting it. Meet our AfterMarket experts at Warranty Chain Management conference, WCM 2018 in San Diego from March 6-8, Booth 11.
Incur Lower Warranty Cost While Generating Greater Revenue
In dealing with warranty packages, organizations around the globe are known to suffer leakage, of thousands of dollars, due to unoptimized claim-processing loopholes. It is advisable to improve how you administer and track all your warranty claims holistically, leaving zero room for false claims. To be able to improve profits, a closed-loop warranty system is necessary. Customer satisfaction is the key. Every organization strives for it in innovative ways. But the best hassle-free claim processing experience customers can get when you have a robust warranty-operations controlling system. Rules-based technology Most of the time, organizations tend to bleed valuable revenue through fraudulent claims, as they have limited control over warranty operations with rigid and worn-out systems. Therefore, it is advisable to implement IT for it to function according to business rules and organization policies accurately. A typical claim process starts from submission, pre-approval, claim evaluation, final approval, and disbursement. The entire cycle needs to be automated along with the incorporation of an EWS (early warning system) to capture real-time cost drivers. Field-asset tracking and management As business dynamics have grown complex, organizations need a system to facilitate field-asset tracking and management better. It is the most important part of warranty management, as it keeps account of the replaceable parts at any given point of time. That, in turn, helps the organization to make provisions in the accounting books to allocate funds and other resources optimally. Orchestration with real-time data For businesses to reap maximum benefit from warranty software, they need to implement a technology which perfectly syncs dealers, service centers, suppliers, service providers, and of course, the OEM itself. Orchestration of the sort makes it possible to share real-time data on business activities across global locations and assess the associated warranty liabilities. An integrated data-driven workflow is essential to limit warranty spend and enhance customer satisfaction. A cut in the warranty spend, in turn, can release more funds, which a smart organization may use to improve product quality through investments in expertise and state-of-the-art R&D facilities. Final thoughts Organizations can use automated analytics and reports to re-evaluate their spend analytics from time to time. It will help them create room for extra savings. After all, the ability to improve aftermarket services in the manufacturing sector depends on how well you optimize other costs. Claim processing itself can be cumbersome and incur massive overheads, with tons of unmanageable paperwork and countless phone calls. Such processes are nothing but revenue killers, which can be streamlined to help focus on productive operations. It is important to stop possessing expensive workforce and spend less time on processes—an attainable goal for manufacturers, which is fast becoming a necessity at all altitudes of the industry.
Extended Warranties: A Retrospection
In today’s competitive business environment, organizations are concentrating not just on sales but the aftermarket promises – made in the form of extended warranties. While people have been reading the abundant material, written by skeptics, on why extended warranties might do more harm than good, efficient contract management has proved to be the key to retaining and expanding customer bases for many manufacturers. There is a growing need for organizations to imbibe technological innovation into their culture. The current drive is to automatically manage rules for payouts, contact deadlines, rates, replaceable spares, and so forth. A better customer management process can only be achieved with an end-to-end support system in place. What customers like Customers relentlessly crave for more – every time and are willing to spread the good words about your brand if you make them feel that warranty claims are a cakewalk. Organizations, thus, use intelligence-driven claim-submission modules for customers to avoid unnecessary interactions. Extended warranty holds the key to OEM profitability, and in the long run, helps achieve deeper market penetration with smart, dynamic pricing. It is a general observation that a field asset may not be replaced entirely, especially if the spare is not included in the warranty. That is where you can create the scope for a customer to benefit from the power of dynamic pricing while offering extended warranty. You can offer to replace the spare for a one-time payment, which optimally covers the cost and doesn’t create a burden on any of the sides of the business. Thus, extended warranty helps attract more customers and improves ROI, while increasing your aftermarket profitability. Offering what customers prefer With artificial intelligence and machine learning enabled features like new quote management, OEMs and dealers can reach out to customers with new offers and promotions. Preparation of such offers can be a daunting task for sales teams, but with smart technology, they can progress efficiently. In this way, customers can benefit from real-time pre-approved discounts, pricing updates, the latest products and services, and more. Organizations are looking for platforms which can deliver such information in a customized way and increase the real value offered to customers. Extended warranty a common practice Decentralized operations of extended warranty have reaped benefits for organizations as well as customers. It is standard practice these days that dealers or distributors offer extended warranties in addition to standard warranties provided by OEMs. This approach creates value and captures market share by extending goodwill toward the market. And, finally It is imperative for OEMs to monitor their internal policies continuously and maintain their command over operations. That would prevent leakage through fraudulent claims and add to customer delight. Organizations require a flexible technology arm, which can modify, cancel, and alter contracts as per client demands, but in line with the organization culture. Get to know more about ideas and thoughts from a team that is passionate about delivering artificial intelligence and machine learning solutions that impact customers’ core businesses. Have something to say about this blog post? Share it with us on LinkedIn, Facebook, Instagram and Twitter. Meet our AfterMarket experts at Warranty Chain Management conference, WCM 2018 in San Diego from March 6-8, Booth 11.
HVAC Profitability: Defining Destiny
HVAC users are spread across the globe, living in diverse climates with increased maintenance requirements. The service contract for each machine often excludes vital parts, and that can be a cause for great customer grievance especially before certain seasons. Service charges also ply, as manufacturers are unable to provide free labor to their sizeable markets. As in many other sectors, the HVAC aftermarket can feel burdensome, leaving little scope for CXOs to launch new offers and improve services. Need of the hour HVAC manufacturers need to plan for improving aftermarket satisfaction at a competitive cost meticulously. Predicting service requirements, utilizing resources cost effectively, and finding better techniques to improve product life are essential for that purpose. It can lead to long-term advantages, as more customers are likely to buy from a manufacturer that has a good reputation for its aftermarket services. The good news HVAC manufacturers need not offer free services to the aftermarket but should strive to provide lower costs and better outcomes than their competitors. It requires streamlining the workflow for every HVAC maintenance date in the calendar through early preparation. Customer satisfaction Customers expect maintenance services to lead to lower electricity bills, better durability, improved performance, and above all – peace of mind. Using historical data related to services, you can identify frequent problems, and their root causes to improve future maintenance. It is also important to have seamless data connectivity over a shared platform in your value chain so that you can help prepare your suppliers and service teams well in advance of scheduled maintenance. Customers also want transparency during the service and around the year. A mobile app with customized interaction can live up to their expectations. Value-chain satisfaction As a result of optimizing the workflow based on data-driven analytics, you can ensure a less stressed-out workforce. You can acquire better leads for equipment and accessories by looking at intuitive dashboards conveying and predicting the requirements, based on real-time data, including everything from weather patterns to customer budgets. Staying prepared for service deployment also lets you offer flexible work hours. Social impact The HVAC sector has a tremendous opportunity to make a difference to the global energy spend. While the primary focus will always be on more profits, what matters is the path they choose to achieve it. Service and product design improvements, to control energy spend, can be carried out based on service history. All you need is a technology to convert those huge piles of data into insights for engineers. Sustainable growth will be the result of competitive aftermarket services and how you use the data generated there. If your database has the relevant details, technology can continuously give you the right insights to make your products more reliable, improve savings during services, and market the right offers to the right people cost effectively.
Introduction to Precision Agriculture Technology
Humankind has witnessed great progress, first with the industrial revolution, healthcare, information technology, followed by biotechnology, and more recently the big data revolution. Increased life expectancy, growing population and shrinking arable land have contributed to mounting pressure on traditional agriculture (and somewhat led to dispelling the agrarian myth). The adoption of technology and extensive potential application of information technology to agriculture has led to the evolution of agriculture into Precision Agriculture. Precision Agriculture may be defined as a set of technologies that help farmers to adopt farm operations to manage field’s variability. The goal is to optimize yield (having better nutrient content) and maximize return on investment. Often Precision Agriculture involves satellite farming or site specific crop management based on observing, measuring, and responding to inter and intra field variability in crops. Steps in Precision Agriculture: The Precision Agriculture cycle can be considered to consist of the following steps or processes: Gather (Data Acquisition) Analyze (Processing the data and transform it into relevant analyzable information) Decide (Analysis of this data for decision making, sometimes via the agronomic model of utilization) Execute (Implementation/Adaptation) Approaches in Precision Agriculture: Broadly, Precision Agriculture can be practiced in either a Predictive Approach or a Control Approach. The Predictive Approach is when practices are adapted prior to start of the season. The predictive approach steps can be categorized as: 1. Gather—Use historical data, such as weather data, soil data, crop status during a period; as the starting inputs. 2. Analyze—Characterize the agro-climatic context, define management zones. 3. Decide—Adjust the crop inputs, such as seeds and fertilizer source. 4. Execute —Vary the sowing density of seeds; vary the Nitrogen application within the fields. The Control Approach is when adjustments are made during the season with an aim of optimizing the yield by reducing/optimizing the in-season requirements. The steps in control approach can be: 1. Gather—Monitor crop growth conditions during the cycle. 2. Analyze —Assess current intra-field variability. 3. Decide—Adjust the crop inputs to crop needs. 4. Execute —Vary the Nitrogen application and chemical application within the field. Tools to Gather Data Precision Agriculture adapts multiple technologies for advancement and betterment of agricultural practices. The tools for gathering the data that can then be analyzed for Precision Agriculture applications are as follows: – GPS to geo-localize the field boundaries, to geo-tag field observations – Sampling (Plant tissue sampling, Soil sampling [texture and nutrients levels analysis]) – Hand sensors and In-vehicle sensors (proxy detection) of crop status (biomass) – Aerial/satellite remote sensing of crop status (biomass, growth anomaly) – Combine (Yield monitoring) Tools to Analyze Data Based on the approach and the type of data gathered for the purpose of Precision Agriculture, processing of the data and transformation into relevant information can be done with the help of information technology and big data processing tools. Tools to Decide On the basis of the inputs from analysis step various models for decision making can be applied. For example, an averaging out approach may aim at averaging the yield throughout the field by reducing/controlling the field variability, this can be achieved by applying or pointing more resources, to regions where the growth lags behind the average field growth. The opposite approach would be to direct more resources (water, fertilizer, chemicals) to regions which already show better growth/performance compared to the field average. Tools to Execute Once the decision has been taken, various tools that can be adapted to meet the goals can be summarized as below. This can be done with the help of tractor combines, robotics or manual intervention. What can be adjusted: Inputs Dose – Seeds – Fertilizers – Chemicals – Irrigation Field Operations (time, fuel) – Tillage – Planting – Fertilizing – Spraying
Solving the Problem of Inefficient Handling of Goods Return with Reverse Logistics
Have you felt that overlooking reverse logistics puts your organization behind others who master the discipline? If yes, it is not you alone, as there are many organizations yet to decide that reverse logistic is a strategic concern. However, it involves adopting the most efficient way of dealing with the process. Reverse logistics is the practice of efficient transportation of finished products from their destinations back to their origin to capture residual value (or salvage value). Manufacturers want to retrieve defective products efficiently from their valuable customers, and IT solutions are a definitive boost in that context. By improving the process, manufacturers can save costs and speed up their service to ultimately promote a positive brand image. It also helps the marketing aspect of business significantly. How large organizations tackle typical challenges To pursue the fresh stock, companies have started focusing on clearing old inventory. However, to do so, there are several hindrances for enterprises. Due to huge sales volumes and extensive customer bases, organizations face the problem of many unidentified and unauthorized returns. Warranty management software establishes total control over such processes by maintaining unique product identification numbers and tracking mechanisms. As all the claims are managed automatically through software, there is no scope for unauthorized system inventory movement without a laid down protocol being followed. Most of the time, organizations are unable to write off a significant amount of returned inventory held in their warehouses. The claim processing rate is far lower than the inward-inventory movement rate, which results from a lack of return agreements with retailers. The latest warranty software are a step ahead in this aspect, as they manage the return policies and protocols laid down right from the beginning of product life cycle. Software capabilities Warranty systems come with cross-functional integration capacity and minimize the claim-processing time, helping improve customer confidence. With high-level integration, the collection of goods from customers can be managed automatically. The software can be synchronized with third-party logistics providers (3PLs). As soon as a claim is processed, an automated intimation is sent to initiate the collection sequence. After the inventory arrives at the organization premises, it is accounted for automatically against a goods receipt note (GRN), leaving no gap for fraudulent claims. With traceability to this extent, organizations can extract maximum value from salvage of the returned goods in parallel to a hassle-free operation. Companies can also re-engineer and reintroduce the product back to the market and derive profit. Meet Tavant warranty experts at Booth #3 at 13th Annual Warranty Chain Management Conference (WCM) on Mar 7th-9th, 2017 in Tuscon, AZ
Do Away with Unwieldy Warranty Challenges: BI & Data Warehousing
Business processes become complicated due to inefficient data sharing. Smart technologies may have brought some improvements with real-time insights about your business ecosystem, but it gets much tougher in the case of an organization dealing with large after-market operations, like in the event of warranty administration and management. A more efficient warranty management system should enhance OEM’s reach to its customers. Numerous factors are affecting the warranty domain. And managing these factors becomes the primary goal for any manufacturing organization. The latest advancements in technology use cutting-edge Business Intelligence (BI) and corresponding Data Warehousing (DW) techniques. These methods are bundled into an advanced management system, which can help you establish more control over your business. Stakeholder experience Business houses willing to maximize their revenue function must empower their stakeholders such as service centers, dealers, distributors and so forth. It is necessary to exploit the capabilities of a linear integrated workflow, which will help reduce warranty costs. Organizations need to aim for maximum customer satisfaction, which can only come from a pleasant, hassle-free warranty claim experience. Automation Technology in this context should be advanced enough to process 90% claims in an automated manner with the help of BI. Such a system can manage complex processes, application data inputs, historical claim trends, data mining, and predictive analysis, and churn out useful results and reports in no time. DW for benchmarking With the use of advanced data warehousing techniques, coupled with robust warranty technology, your organization can keep track of the entire life cycle of the product, which would be beneficial in benchmarking the critical quality parameters. Where does your current technology stand? Does your warranty technology automatically draw references from the claim data with the benchmark data and churn out automatically generated quality reports? That is not the only aspect which is necessary. The technology should aid product development based on claims history as well. Setting up the technology should also be simple. Industrial standards require it to be carried out within minutes and without the support of your internal IT department. A modular, in-house, platform-based architecture should help speed up the integration of the software with your organization’s IT landscape, which might include legacy systems. It should allow cost-effective future expansions as per your business needs as well. It’s all about customer experience! With the use of BI and advanced analytics, your customer can get the power of a mobile-based application, which can be used to make a claim. After a claim is recorded, instantaneously the software should analyze the policies and the procedure for claim disbursement. If it is necessary to summon a field staff, then the message should automatically be sent to the nearest available personnel. Only then can the customer walk away with an enhanced experience, helping create a better brand image and market reach. Meet Tavant warranty experts at Booth #3 at 13th Annual Warranty Chain Management Conference (WCM) on Mar 7th-9th, 2017 in Tuscon, AZ
Gaining Competitive Edge with Connected, Data-Intensive Warranty Systems
Since raw data hardly serves any purpose, it needs to be analyzed. One of the biggest problems with the warranty business is huge quantities of data getting generated every second. This data, coming from various sources, needs to be analyzed. Data makes sense when channeled to specific points of input. Once the data is processed into actionable insights, business units can develop enough intelligence to improve the decision quality. How intensive is data? Data normally comes from business transactions and social media, besides other capture points like sensors. Ideally, reporting and analysis should match the speed at which data is being generated. Data proves useful when various thoughtful points are developed for it to be translated into effective strategies—through real-time knowledge of workflow and market parameters. Data-intensive warranty management solutions The term data-intensive computing is used to describe applications that are I/O bound. Such applications devote the largest fraction of execution time to leverage the movement of data. They can be identified by evaluating “computational bandwidth”—the number of bytes of data processed per floating-point operation.[1] Warranty management applications being conceived these days belong to that category and handle big data to help us understand the core problems. One of the most important goals of such technology is to reduce decision-making liabilities. For good decision making, it is preferable to use data that covers a vast expanse of the warranty ecosystem and enables insights closer to reality. Without big data, quantity and quality of insights become limited to just some transactions and the immediate ecosystem. A warranty management application must be connected to the maximum possible data input points for the best possible analysis. The application should cover all possible operational, monetary, mechanical, and market-oriented data sources such as public records of other competitors, telematics, manufacturing methods, and customer touch points. Gaining customer preference, cutting cost, and competitive edge With the help of a connected, data-intensive warranty management system, it is possible to cut down costs. Once we have surrounded our system with a set of technologies to handle big data, and thereafter enabled warranty analytics, we are able to analyze the causes of product failures and make improvements—eventually cutting the cost borne during warranty services. Data and analytics also help us to predict optimal allocation for warranty reserves more accurately. This results in smoother business operation with accurate budget allocation. Data-capture technology also let us implement customer service through faster electronic medium such as mobile apps and cut a great amount of service costs. In the long run, the right analytics platform helps us facilitating effective monitoring of all activities, including Claims registered per user, in real time. With software improving real-time visibility into our ecosystem and customer-facing processes, the rate of success in decision making is growing manifold. It also helps us in identifying the genuine claims faster with more accuracy. Eventually, generating more values for customers by reducing the endless waiting time for the verification to be completed. The damaged parts can be tracked and recovered, if needed, using radio frequency. And therefore, the supplier performance can be rated accurately. Using such an approach, notifications are timely, allowing value chain partners to identify areas of improvement and realize more value. This helps in improving overall efficiency to bolster the bottom line for a business. [1] Reagan W. Moore, Arcot Rajasekar, et. al., Data Intensive Computing, (Association for Computer Machinery Digital Library, 2007), Chapter 5.1.
How Automation of Warranty Processing Adds Happiness to Dealers, Service Centers, and Customers
The sheer volume and complexity of warranty claims can be overwhelming for organizations. This makes fraud-check on claims quite cumbersome. But if precision is your motto, start by re-engineering slow manual processes. Wonder why? They are prone to errors and impede productivity. Strive to achieve maximum automation in the processing of claims. Automation comes with several benefits: Meticulous data extraction followed by validation Quicker claims processing Single version of truth across manufacturer/dealer/service-center locations, thus improving efficiency Transparency in the process Let’s examine how the process flows with automation The automation of warranty processing begins with claims. Technology allows customers to submit claims from any location. On the other hand, the organization is able to track the claims. The system allows manufacturers to set rules, so that claims on every product can be processed in a unique way, if necessary. With the system automated, it is easy to validate claims efficiently. Minute details across various dealer locations can be confirmed in real time. It is also possible to route the claim details according to specific job codes, both within and outside the organization due to the cross-functional integration available in the system. The system helps track suppliers of the parts under claim. This speeds up parts-return and supplier recovery, and upholds trust and transparency. Further, payments can be made according to specific prevailing rates for a particular claim. Here is how you stand to gain A user-friendly platform that simplifies and speeds up the claims process makes life easier for customers and service providers Total automation of processes that were earlier manual—submission of claim, routing of claim, parts return, supplier recovery, payments—ensures accuracy, reduces the drudgery of long-drawn paper work, and improves efficiency Accurate and reduced warranty payouts result in optimal performance Visibility and communication at every step of the lifecycle is improved The overall cost of warranty processing and associated administration comes down Errors related to warranty claims are reduced to a minimum Parts return and supplier recovery are made simpler and more transparent Fraudulent and duplicate claims are actively screened and totally eliminated Down there, do you see happier customers, saved money, and more efficient delivery of services? I think I do.